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A Brief Outline of the HUD-1
Settlement Statement
(Click Here to Print PDF)
Let’s take a look at the ever-popular HUD-1 Settlement Statement that
RESPA officially endorses for all transactions: new
loans, assumptions, all-cash, owner finance, etc. The 2-page, legal sized
document is sure to confuse each and every buyer and seller (as well as a
few other folks, too.)
The first
page summarizes the entire financial transaction. The left half of the
page is devoted to the buyer. The top portion covers the charges the buyer
is facing. The sales price of the subject property is first, followed by
closing costs and pro-rata taxes (if the closing takes place during the 4th
quarter). The bottom portion covers buyer credits: earnest money, new
loan amounts and any taxes.
The right side of the first
page is devoted to the seller and is a reversal of the buyer's side. The
top covers credits: the sales price and any pro-rata tax credit. The
bottom portion covers charges: closing costs, mortgage payoffs, pro-rata
taxes, repairs, etc.
Page two is
simply a detailed breakdown of all buyer and seller costs, summarized on
page one. The buyer's information is in the left column, the seller's in
the right.
The HUD-1
is usually the first document discussed during a real estate closing. Sit
back and let your friendly closer take over!
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